Dalmia Securities is bullish on Sagar Cements has recommended buy rating on the stock with a target price of Rs 962 in its research report dated March 15, 2019.
Dalmia Securities' research report on Sagar Cements
Sagar Cements Ltd (Sagar) is southern based cement manufacturing company with a cement capacity of 5.75 MT and clinker capacity of 3.80 MT in Mattampally, Gudipadu and Bayyavaram. All its products are being sold under the brand “Sagar”. The company has a well spread out distribution network of 2150 dealer / stockist aiding cement sales in multiple territories like Telangana, Andhra Pradesh, Tamil Nadu, Karnataka, Maharashtra, and Orissa. However, company is expected to earn ~85% of its FY19 revenues from south India. Limestone requirement of the plant is met from the company's captive mine located, adjacent to the plant.
We maintain BUY rating on the stock with a Target Price of INR 962/share (valuing at average of FY21E EV/EBITDA of 9.0x & EV/Ton of USD $35).
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